Pension Systems Corporation ERISA 408 (b)(2) Disclosure
For Employee-Participants

This report describes the fees currently paid for administrative and record-keeping services provided by Pension Systems Corporation. We've tried to make the report as comprehensive and easy to understand as possible. As you review it, keep in mind that the information it contains is a snapshot gathered from various sources and databases, and is subject to change over time.

The information in this report is provided by Pension Systems Corporation to your employer to satisfy the service provider fee disclosure requirements under ERISA 408(b)(2). This information will assist your employer, as plan sponsor and fiduciary, in making informed cost-benefit decisions with respect to the plan.

The custodian(s) holding your personal 401k plan assets will also be provided to your employer with service and fee disclosure information. Under ERISA 404(a)(5) your employer is required to provide you with details of any fees deducted from your 401k savings, and the impact these deductions have on the value of your account.

1. Services Disclosure

Pension Systems Corporation ("Recordkeeper") provides your company with 401k recordkeeping services. These services include:

  • IRS-approved 401k prototype plan and related documents.
  • Summary Plan Description and Adoption Agreement, customized to Company's specifications.
  • 401k plan enrollment documents and materials.
  • Maintaining secure websites used by employee-participants to manage and monitor their 401k accounts.
  • Maintaining secure websites used by the Company's plan sponsor to upload contribution information and facilitate management of the Company's plan.
  • Maintaining an investment platform that supports a line-up of investments and/or self-directed brokerage accounts selected by the Company for the benefit of its employee-participants.
  • Maintaining record-keeping databases that hold details of all participant and employer transactions in and out of the 401k plan, and the ownership and value of all plan assets and their disposition.
  • Services to facilitate participant-initiated 401k loans, hardship withdrawals, post-employment distributions, rollovers and other similar transactions.
  • Statements for employee-participants and auditing reports for plan sponsor.

2. Recordkeeping Disclosure

The only compensation earned by Recordkeeper is fees for materials and service; the fee is invoiced directly to your employer. At the company's discretion, a portion of the Recordkeeper fee may be paid by deductions from employee-participants' accounts, on a fully-disclosed basis. Recordkeeper collects NO indirect compensation, commissions, revenue-sharing fees, 12-B I mutual fund fees, etc. from any third-party sources.

3. Plan Investments Disclosure

For Plans Using Mutual Funds: All investments in your Company's 401k plan have been selected by your employer. If your plan uses mutual funds, fees and hypothetical performance projections are provided to your employer by the fund distributors, who will then makes this information available to you. Mutual fund fee and performance disclosure information, plus online prospectus, are viewable from this website, and can be downloaded and printed. Mutual fund companies charge fees for providing various investment and account management services. These investment-related fees are typically paid by you, the plan participant, from your plan assets. Your employer will provide you with information detailing these fees, and their impact on the performance of your 401k.

For Plans Using Self-Directed Brokerage: If you use a self-directed brokerage account for your 401k, the brokerage will provide your employer with fee information relevant to your individual account; the employer will then provide this information to you.

For Plans Using the Services of an Advisor: If your plan uses the services of an investment advisor, this third-party may be compensated from plan assets, or directly by your employer, or both. If a portion of the advisor's fee is paid through deductions from your personal 401k account, these deductions will be fully disclosed to you by your employer.

401k Fee Disclosure: What Plan Employee-Participants Need to Know

Understanding Plan Fees and Expenses
We know that saving for retirement is important to you. Accumulating the savings you'll need is a big goal. Your 401k retirement plan is not only a convenient way for you to build up your savings, but it also offers tax benefits that can help your account grow. We are committed to providing you with the information you need to make the most of your retirement plan. That's why we want to call attention to a new communication you'll receive soon regarding plan fees, expenses, and investments.

Why is this important?

We want you to have all the information you need to manage your 401k retirement account wisely. Fees and expenses affect the returns of your investments and the size of your account balance. Over time the cumulative impact fees and expenses can be substantial, so you'll want to take them into consideration when you are making investment and other decisions about your retirement savings.

I didn't know there were plan fees and expenses. Are they new?

No they aren't. There have always been costs associated with your retirement plan - and most plans like yours. What is new is the communication you'll receive, which will provide a clearer picture of the different fees and expenses associated with your participation in the plan.

What costs do I pay?

You may be paying three different types of costs:

  • Investment-related costs, such as fund operating expenses and shareholder-type fees (such as sales, charges, redemption fees, surrender charges, and account fees).
  • Plan administration expenses, such as fees for recordkeeping, accounting, and legal services required to operate the plan as a whole.
  • Fees for any plan services provided to you individually, such as processing a plan loan or distribution. If you don't use the services, these fees won't apply.

These fees and expenses are not unique to your plan. All retirement plans have them in one form or another. And when you invest - whether inside or outside of your retirement plan - there are usually costs involved.

What is the "Net Expense Ratio" ?

The Net Expense Ratio is the percentage of fund assets used to pay for the fund's operating expenses and management fees, including 12b-1 fees, administrative fees, and all other similar costs incurred by the fund. The Net Expense Ratio does not include sales charges or commissions paid to brokers. If there are sales charges or commissions paid by the fund, these charges are reports in a separate schedule. The Net Expense Ratio is reported in the annual fund prospectus, and the quarterly prospectus updates. A fund's annual return---what you actually earned---is reported after the Net Expense Ratio has been deducted from the fund's gross performance.

How will the investment information help me?

The information is designed to help you make better, more informed decisions about how to invest your 401k retirement savings. For variable return investment options, you'll be able to see how the investments have performed in the past over various time frames and review the costs associated with them. (Past performance doesn't guarantee future results.) If there are fixed return investment options, you'll find information about the rates they pay and applicable fees.

Does that mean I'll be able to see performance Information about all my plan's investment options in one place?

Yes - and the information will be presented in a user-friendly format. For example, the historical return information for investments with variable returns will be presented in a way that will allow you to compare the investments with each other and with the performance of an appropriate benchmark index (for example, the S&P 500, an index that is often used as a performance benchmark for large company stock investments). The investment returns you'll see have already been adjusted to reflect operating expenses, so the figures provided represent net returns. If you would like additional information about your investment alternatives, an Internet address will be provided.

How do I know the plan's fees and expenses aren't too high?

Plan officials regularly review fees and expenses to make sure they are reasonable and competitive.

Are low fees the most Important factor in choosing investments?

Not necessarily. Fees are just one of the factors you should consider when choosing investments for your 401k retirement account. You risk tolerance, investing time frame, and personal goals are also important factors to consider. Note that somewhat higher fees and expenses for specific investments may be appropriate, given what you receive for your money. Bear in mind, however, that higher investment management fees do not necessarily mean better investment performance. You should be aware of an investment's objectives and strategy, as well as its performance history and how that history compares to an appropriate benchmark. If that investment better satisfies your own objectives, a somewhat higher fee structure might be appropriate.

Is this new communication a one-time thing?

Actually, no. You'll receive a similar statement every year. In addition, you'll receive quarterly statements that show the dollar amount of the plan-related fees and expenses (administrative and individual) that have been charged to or deducted from your account, along with descriptions of the services for any changes or deductions that were made. These may be included with your quarterly benefit statements.

401k Recordkeeping Disclosure